Fast Five Shorts | Walmart Tests Letting People Open Locked Display Cases With Their Mobile Devices
In the latest edition of Omni Talk’s Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Avalara, Mirakl, Ownit AI, and Ocampo Capital Chris Walton and Anne Mezzenga discuss: Walmart Testing Letting People Open Locked Display Cases With Their Mobile Devices
For the full episode head here:https://youtu.be/HfqxboxZ35Q
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Transcript
Walmart is testing new technology in stores that would let people open security locks for products with their cell phones.
Speaker A:According to Bloomberg, the technology is currently live in a few hundred Walmart stores and right now only allows employees to unlock cases without manually using keys.
Speaker A:Well, the company is rolling out the test to its employees first.
Speaker A:It has reportedly also discussed extending mobile unlocking to Walmart plus loyalty members.
Speaker A:Chris, this is also where A and M is going to put you on the spot with the A&M CRG question.
Speaker A:Chris, they want to know being able to unlock secured products on shelf yourself versus waiting for employees would be a meaningful time saver and consumer experience benefit.
Speaker A:But Chris, would you have any concerns about the exclusivity of restricting this to Walmart plus members?
Speaker B:Ooh, and that is an awesome question.
Speaker B:We're starting out hot, right out of the gates.
Speaker B:My short answer to that question is 100% yes.
Speaker B:I would have problems.
Speaker B:I would have concerns, yes.
Speaker B:But I'll come back to that in a second because I think there's a lot of ground to cover with this story.
Speaker B:So first of all, I love this idea as a test.
Speaker B:You know, having worked in a Target store where I had to find a key to unlock the video game cabinets when I did not have one, was always a major pain in the ass and was definitely a big customer disappointment when, you know, you go to ask the employee that doesn't have it and you don't have it and you just gotta wait and you gotta find it and, and there's far more mobile devices going around in a store than there are like sets of keys.
Speaker B:That's my opinion anyway.
Speaker B:Right, so, so, you know, with that said, I think enabling employees to unlock cabinets via mobile devices, you can also personally identify the user that way too, which when in comparison to a key, you can give that key to anyone you don't know who's unlocking that cabinet.
Speaker B:So that has, you know, shrink implications as well.
Speaker B:So all that makes this a big win in my book from a test perspective.
Speaker B:But now the rumors that they're going to be again experimenting this, experimenting with this for Walmart Plus, I hate that idea.
Speaker B:Oh really?
Speaker B:Because Walmart is.
Speaker B:Yeah, I hate it.
Speaker B:And because Walmart's essentially saying it to its customers, look, you're okay to unlock the cabinets because you're paying US$98 per year.
Speaker B:That just doesn't smell right to me.
Speaker B:Like, why can I get my Tide from a cabinet?
Speaker B:Because I'm paying $98 per year.
Speaker B:I'm going into Walmart.
Speaker B:I should be able to get the same benefits.
Speaker B:So I'm all for experimenting with the Walmart app being a tool to unlock a cabinet, but not Walmart Plus.
Speaker B:It's just, it's not in the ethos of Walmart.
Speaker B:And the other point I would make, even with the Walmart app, you could put some type of extra identity verification in that app to enable any consumer to unlock a cabinet.
Speaker B:So, so, so that's why I like, I like where this could go.
Speaker B:But at the end of the day, I hate the idea of Walmart plus being the conduit by which people as consumers can unlock these cabinets.
Speaker B:What do you think?
Speaker B:I mean, you sound like you disagree.
Speaker A:I mean, I, I think that there's a huge opportunity here and I think you're nailing it with the Walmart app.
Speaker A:I think that very similar to how Target is doing, like the Target Circle I think is a great analog for this where you don't have to pay to be part of Target Circle.
Speaker A:It's just the basic loyalty program.
Speaker A:I do think that it would be okay for Walmart to include this as part of the perks of a regular loyalty program.
Speaker A:I don't know that it makes sense for us to have, you know, for it to just be for Walmart plus members.
Speaker A:But I think like this is a huge advantage and it should, you know, there should be some identifier if this is truly the way that Walmart's going to go about this.
Speaker A:And I still don't know that I agree that, you know, keeping things under lock and key is the best experience as it is.
Speaker A:Like, I'm much more, that's a whole nother point.
Speaker A:Yeah, I'm much more of a proponent of going the Sam's Club way of things where you know, you're identifying yourself upon entering and then you, you just, you'd have zero disruption to the shopping experience.
Speaker A:I also think like if now customers are opening up the doors, like how do they get locked again?
Speaker A:Like, I haven't seen these devices.
Speaker A:I know a lot of retailers are testing them, but I haven't seen these devices firsthand for myself.
Speaker A:So something kind of makes me curious about like is this really going to stop shrink in the long term if you know, somebody leaves the door open or something happens after they grab their soap and knowing, you know, just the, the traffic and throughput into a mass merchandise store like a Walmart, like that's bound to happen.
Speaker A:So I guess I have a lot of concerns about like the bigger problem here of how are you going to identify who's in your store and provide an optimal shopping experience for those people.
Speaker A:And I think that it's, you know, having, having an app identify you that you don't have to pay for, that's one way of doing it.
Speaker A:But I really think it gets down to the bigger issue of like, how are you doing controlled entry and exit of the store?
Speaker A:Or like, what's the real investment to make this shopping experience optimal for the future?
Speaker B:Yeah, it's funny, my mind wanted to go there too, like the controlled entry and exit point.
Speaker B:But the one thing that I don't think any of us really understand yet too is, is how much, how much of the shrink problem is employee related versus how much is consumer related too.
Speaker B:So in a way this helps solve the employee issue, which a controlled entry and exit doesn't necessarily.
Speaker B:Now, my hunch is that it's still a little bit of both and probably more on the consumer side than the employee side, quite honestly, because you can monitor your employees a lot more closely than you can your consumers and you can take action on them much more swiftly than you can your consumers too.
Speaker B:So, yeah, I think at the end of the day, like, you're right.
Speaker B:Like, if this is the experience that we're going to end up creating, it's not a great experience.
Speaker B:And I'd rather just, you know, come up with some new way to identify, identify myself at entry.
Speaker B:Like, whether it's like, hey, do I have to show my id?
Speaker B:Do I have to get my credit card to enter if I don't have one, do I go to the Walmart help desk and sign up for one?
Speaker B:You know, so you're not limiting anyone, you're just requiring that as a step to shop.
Speaker B:And, and you know, we've talked about it a lot.
Speaker B:Do we start to see that more?
Speaker B:I don't know.
Speaker B:I just like that.
Speaker B:I'm with you.
Speaker B:I like that idea better than what this is doing.
Speaker B:But this, given the constraints, is still like, I think it's a smart test, particularly for the employee side of things.
Speaker A:Yeah, I mean, I think the other thing too is like they're, you know, do you feel the same way about scan and go?
Speaker A:Like, should scan and go then be limited just to Walmart plus members?
Speaker A:Like it is right now too.
Speaker A:So, like, could you start to unlock that?
Speaker A:If again, like, does Walmart to your point, because they have this ethos, like, do you just create new abilities in the app because Walmart's still getting data from the customers, then they're still identifying the customers in that scenario.
Speaker A:But can it be something that's available to everyone versus just people who are paying that upper level Walmart plus?
Speaker B:Yeah, and we're going to go long here on this one in particular because there's a lot here in this story.
Speaker B:And, and your question about Scan and Go is interesting too because I had a conversation with the Business Insider reporter this week.
Speaker B:He asked me that exact same question, you know, and what I told him is like Scan and Go is standing.
Speaker B:Scan and Go is an opt in to use.
Speaker B:I can choose to shop the store that way but unfortunately if I want to go buy it by tide behind a locking cabinet, everyone is forced to shop that way.
Speaker B:That's why this feels different to me.
Speaker B:And it's asking the Walmart, it's, it's delineating the Walmart clusters too much if you go the Walmart plus angle to unlock the cabinet.
Speaker B:So I don't know.
Speaker B:But yeah, there's, there's a lot of ground on this story that just makes your mind go, whoa, let me stop and think about what the right approach is here.
